In today’s briefing:
- SK Networks Launches a Tender Offer for SK Rent-A-Car
- Offshore China ETFs Rebalance Preview: Two Changes Expected in September
- Premier’s (PMV AU) Four-Way Split
- Zhongsheng Group (881 HK): Could Be A Winner In The Long Run, But No Short-Term Visibility
- The Clorox Company: Unmasking Their Strategy to Restore Pre-Pandemic Margins! – Major Drivers
- Mondelez: Ignore The Noise And Invest In Strong And Well-Managed Brands
- Sichuan Baicha Baidao Industrial Pre-IPO Tearsheet
- Porsche Automobile Holding: H1 SOTP and Discount to NAV
- YERB.U: Recent Announcements Reaffirm Investment Thesis
- MGM Resorts International: An International Strategy That’s Raising Eyebrows? – Major Drivers
SK Networks Launches a Tender Offer for SK Rent-A-Car
- We have a positive view of SK Networks’ tender offer of SK Rent-A-Car.
- SK Networks is trying to buy the entire SK Rent-A-Car which is enjoying solid growth in sales and profits. SK Networks plans to eventually delist SK Rent-A-Car.
- The shareholders of SK Rent-A-Car have a choice of tendering their shares receiving cash (at the tender offer price of 13,500 won) or receiving shares in SK Networks.
Offshore China ETFs Rebalance Preview: Two Changes Expected in September
- Based on the close of 21 August, there could be two changes for the iShares A50 China (2823 HK)/ CSOP A50 (HKD) (2822 HK) in September.
- NARI Technology Co Ltd A (600406 CH) and CSC Financial (601066 CH) should replace Tongwei Co Ltd A (600438 CH) and Shaanxi Coal Industry (601225 CH) in the ETFs.
- There are couple of stocks with over 1x ADV to trade from the ETFs. Plus there are cash and carry positions that will need to be rebalanced, adding to flow.
Premier’s (PMV AU) Four-Way Split
- In tandem with a trading update this morning, Aussie retailer Premier Investments (PMV AU) announced a break-up of the empire. And the departure of the CEO.
- Premier said it is exploring the demerger and creation of (at least) three new separate companies, encompassing Peter Alexander, Smiggle, and Apparel Brands (Just Jeans, Dotti and Portmans, etc.).
- Separately, Richard Murray, who joined Premier from JB Hi-Fi Ltd (JBH AU) two years ago, will exit the company on September 15.
Zhongsheng Group (881 HK): Could Be A Winner In The Long Run, But No Short-Term Visibility
- China MeiDong Auto (1268 HK) announced a profit warning this morning, expecting a 90% decline in net profit for 1H23.
- Luxury auto dealer in China is facing major uncertainties in its business model, with no visibility in the near term.
- However, Zhongsheng Group (881 HK) currently employs the best long-term strategy amidst industry transformation. Suggest to keep a close eye on the name.
The Clorox Company: Unmasking Their Strategy to Restore Pre-Pandemic Margins! – Major Drivers
- The Clorox Company managed to exceed analyst expectations in terms of revenue and earnings.
- Strong results at the quarter’s end highlight the tremendous progress the company has made with its strategic priorities.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
Mondelez: Ignore The Noise And Invest In Strong And Well-Managed Brands
- Mondelez has outperformed the market both on an absolute and risk-adjusted basis.
- The company is in a very good position to improve margins to higher levels than currently expected.
- The stock remains as one of my favourite picks in the sector. The stock is one of the company’s favourite picks.
Sichuan Baicha Baidao Industrial Pre-IPO Tearsheet
- Sichuan Baicha Baidao Industrial (SCBCBDID CH) is looking to raise up to US$300m in its upcoming HK IPO. The deal will be run by CICC.
- Sichuan Baicha Baidao Industrial (SBBI) sells new-style tea drinks through its ChaPanda stores, most of which are franchised.
- As of the Latest Practicable Date (8th Aug 2023), ChaPanda’s store network comprised 7,117 stores, spanning across 31 provinces and municipalities in mainland China.
Porsche Automobile Holding: H1 SOTP and Discount to NAV
- My updated SOTP shows that the shares of Porsche SE are trading at a still massive 44.9% discount to NAV. The discount has come down from 50.8% on 28 February.
- The shares of Porsche SE suffer from a double discount, the holding structure (with a new layer since the listing of Porsche AG) plus a non-voting discount.
- My SOTP valuation indicates that the shares are significantly undervalued, but it is challenging to pinpoint a short-term catalyst that could realise this upside potential.
YERB.U: Recent Announcements Reaffirm Investment Thesis
- Yerbaé announced the closing of the first tranche of its celebrity investment round, including various prominent athletes and entertainers.
- The announcements include closing the first tranche of its celebrity investment round, an expansion into Costco, and record sales on Amazon Prime Day.
- Celebrity Investment Round This morning, YERB.U announced that it has closed the first tranche of its celebrity investment round, raising ~$4M.
MGM Resorts International: An International Strategy That’s Raising Eyebrows? – Major Drivers
- MGM Resorts International delivered an all-around beat in the most recent quarterly result, demonstrating robust growth, highlighted by a record for consolidated net revenues.
- The company showcased strength across its diverse portfolio, with solid earnings from domestic operations, particularly notable in MGM China and BetMGM.
- Regional operations also displayed year-over-year growth on a same-store basis, reflecting the company’s commitment to maximizing profitability while delivering exceptional customer service.
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